Jaguar
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Post by Jaguar on Nov 12, 2013 14:53:51 GMT -5
Oh there's some really good, coffee on screen posts on this thread. Priceless
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 12, 2013 15:16:07 GMT -5
I have a question, and this is a legitimate inquiry. If you've been in business for several years now, and your business just barely breaks even while you both work 7 days a week, and you can't even afford things like health insurance, why do you stay at it? Seriously, I'd like to understand what motivates you to continue. Do you have a reasonable expectation that you will be able to work less and bring in a comfortable income in the near future? Is is just because it's part of that whole "American Dream" thing to own your own business? Do you enjoy being part of the community? Is it fulfilling in some way that isn't easily seen? Do you guys, like Dark, just hate working for other people so much that you'd do anything to avoid it? I'm actually curious here, so perhaps someone else who's been in the same position can jump in. In YOUR face rocky..... in your FACE rocky.... My face is exhausted from all the being in it...
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Wisconsin Beth
Distinguished Associate
No, we don't walk away. But when we're holding on to something precious, we run.
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Post by Wisconsin Beth on Nov 12, 2013 15:22:08 GMT -5
In YOUR face rocky..... in your FACE rocky.... My face is exhausted from all the being in it... that face, that face That covergirl face...
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imawino
Junior Associate
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Post by imawino on Nov 12, 2013 15:25:58 GMT -5
I have a question, and this is a legitimate inquiry. If you've been in business for several years now, and your business just barely breaks even while you both work 7 days a week, and you can't even afford things like health insurance, why do you stay at it? Seriously, I'd like to understand what motivates you to continue. Do you have a reasonable expectation that you will be able to work less and bring in a comfortable income in the near future? Is is just because it's part of that whole "American Dream" thing to own your own business? Do you enjoy being part of the community? Is it fulfilling in some way that isn't easily seen? Do you guys, like Dark, just hate working for other people so much that you'd do anything to avoid it? I'm actually curious here, so perhaps someone else who's been in the same position can jump in. In YOUR face rocky..... in your FACE rocky.... The second version, definitely. It has much more oomph.
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imawino
Junior Associate
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Post by imawino on Nov 12, 2013 15:27:02 GMT -5
In YOUR face rocky..... in your FACE rocky.... My face is exhausted from all the being in it... How dirty did you mean that to sound?
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tloonya
Junior Associate
What status?
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Post by tloonya on Nov 12, 2013 15:37:36 GMT -5
In YOUR face rocky..... in your FACE rocky.... My face is exhausted from all the being in it... Well...I am not good about all this 'wording' but I meant I am paying $4K home bills, $4k biz bills, $4+K salaries monthly. 12x12=$144K per year of the money I am getting...somewhere... Plus I take food home every day from the store. It is at least $300 per week. YEP! I am feeding colledge kids as well and I like to splurge on seafood. Another $15K. Plus my some other expenses. It is roughly $200K per year that I am getting...somewhere, right? I am assuming it is what profit is, no?
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 12, 2013 15:41:57 GMT -5
My face is exhausted from all the being in it... Well...I am not good about all this 'wording' but I meant I am paying $4K home bills, $4k biz bills, $4+K salaries monthly. 12x12=$144K per year of the money I am getting...somewhere... Plus I take food home every day from the store. It is at least $300 per week. YEP! I am feeding colledge kids as well and I like to splurge on seafood. Another $15K. Plus my some other expenses. It is roughly $200K per year that I am getting...somewhere, right? I am assuming it is what profit is, no?
No.
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Angel!
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Post by Angel! on Nov 12, 2013 15:47:03 GMT -5
My face is exhausted from all the being in it... Well...I am not good about all this 'wording' but I meant I am paying $4K home bills, $4k biz bills, $4+K salaries monthly. 12x12=$144K per year of the money I am getting...somewhere... Plus I take food home every day from the store. It is at least $300 per week. YEP! I am feeding colledge kids as well and I like to splurge on seafood. Another $15K. Plus my some other expenses. It is roughly $200K per year that I am getting...somewhere, right? I am assuming it is what profit is, no? Profit is what is left after all the bills. So the $4k in biz bills is not profit. The $4K salaries are not profit. I am honestly a little confused about bringing home $15K in food/yr. That seems not right for some reason, but I don't know enough about this stuff. Basically you are using the business to buy your household food - allowing for compensation without paying taxes. IDK. Regardless money coming in does not equal profit. Money left over after all inventory is purchase, salaries are paid, bills are paid, etc is profit.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 12, 2013 15:50:39 GMT -5
The $48k store salaries and the $48k store bills are store expenses. Subtract those from your store income, and you have a closer approximation of your store's profit. Here's those numbers translated into a basic formula. Someone correct me if I'm misunderstanding.
$144k gross store income -$48k store salaries -$48k store business expenses ======= $48k profit for owners
And you're declaring that $300 weekly that you pay yourself in food products as part of your gross income, right?
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 12, 2013 15:52:20 GMT -5
Well...I am not good about all this 'wording' but I meant I am paying $4K home bills, $4k biz bills, $4+K salaries monthly. 12x12=$144K per year of the money I am getting...somewhere... Plus I take food home every day from the store. It is at least $300 per week. YEP! I am feeding colledge kids as well and I like to splurge on seafood. Another $15K. Plus my some other expenses. It is roughly $200K per year that I am getting...somewhere, right? I am assuming it is what profit is, no? Profit is what is left after all the bills. So the $4k in biz bills is not profit. The $4K salaries are not profit. I am honestly a little confused about bringing home $15K in food/yr. That seems not right for some reason, but I don't know enough about this stuff. Basically you are using the business to buy your household food - allowing for compensation without paying taxes. IDK. Regardless money coming in does not equal profit. Money left over after all inventory is purchase, salaries are paid, bills are paid, etc is profit. Yup, this would be an audit flag, I'm sure. It's a large enough number that it wouldn't be ignored as incidental or de minimus. I'd be pretty certain the IRS expects that to be declared as $15k of household income.
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tloonya
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What status?
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Post by tloonya on Nov 12, 2013 15:54:54 GMT -5
Well...I am not good about all this 'wording' but I meant I am paying $4K home bills, $4k biz bills, $4+K salaries monthly. 12x12=$144K per year of the money I am getting...somewhere... Plus I take food home every day from the store. It is at least $300 per week. YEP! I am feeding colledge kids as well and I like to splurge on seafood. Another $15K. Plus my some other expenses. It is roughly $200K per year that I am getting...somewhere, right? I am assuming it is what profit is, no? Profit is what is left after all the bills. So the $4k in biz bills is not profit. The $4K salaries are not profit. I am honestly a little confused about bringing home $15K in food/yr. That seems not right for some reason, but I don't know enough about this stuff. Basically you are using the business to buy your household food - allowing for compensation without paying taxes. IDK. Regardless money coming in does not equal profit. Money left over after all inventory is purchase, salaries are paid, bills are paid, etc is profit. So business is bringing $200 of what?
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 12, 2013 15:58:47 GMT -5
I don't know where you got the $200k number. From your post, it seems that:
Your store earned $144k of gross income annually with a profit of $48k (less $96k of expenses).
Your household income is probably, then, the profit of $48k, any salaries you pay yourself, and $15k of food products.
Roughly estimated, of course. Someone else is probably much better at this than me.
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tloonya
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What status?
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Post by tloonya on Nov 12, 2013 16:02:29 GMT -5
Yu kidding me, right? I go home, I take MY food. Whats the problem I after all PAID for it!!!
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Angel!
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Post by Angel! on Nov 12, 2013 16:07:47 GMT -5
Profit is what is left after all the bills. So the $4k in biz bills is not profit. The $4K salaries are not profit. I am honestly a little confused about bringing home $15K in food/yr. That seems not right for some reason, but I don't know enough about this stuff. Basically you are using the business to buy your household food - allowing for compensation without paying taxes. IDK. Regardless money coming in does not equal profit. Money left over after all inventory is purchase, salaries are paid, bills are paid, etc is profit. Yup, this would be an audit flag, I'm sure. It's a large enough number that it wouldn't be ignored as incidental or de minimus. I'd be pretty certain the IRS expects that to be declared as $15k of household income. Ok, that is kind of what I was thinking, but honestly don't know much about this.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 12, 2013 16:08:50 GMT -5
Yu kidding me, right? I go home, I take MY food. Whats the problem I after all PAID for it!!! No, your business paid for it. Then (presumably) your business reduced its taxes by calling it a deductible business expense. So you're actually committing tax fraud by taking it home without paying those taxes back (by declaring it as income).
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Angel!
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Post by Angel! on Nov 12, 2013 16:13:07 GMT -5
Yu kidding me, right? I go home, I take MY food. Whats the problem I after all PAID for it!!! No, your business paid for it. It is part of your business inventory. And the $200K (although it is really lower) is gross income as Rocky said. It is how much you are bringing in sales each year. The profit is then that amount minus all the business bills. Most of that money is going to pay for the food you are selling & for your employees that sell it. Look at it this way: Pretend you spent a million dollars on fruit & then turned around & sold it all for a million. With your system you are saying you made a million in profit. But, you really made 0 because what you got from the sales was no more than what you spent purchasing the fruit. In that case you gross income would be a million, but profit would be 0.
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Angel!
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Post by Angel! on Nov 12, 2013 16:14:23 GMT -5
Yu kidding me, right? I go home, I take MY food. Whats the problem I after all PAID for it!!! No, your business paid for it. Ha Ha, JINX. Although, I really am just a slow typer because I took several minutes longer to write it
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Deleted
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Post by Deleted on Nov 12, 2013 16:31:35 GMT -5
No, your business paid for it. Ha Ha, JINX. Although, I really am just a slow typer because I took several minutes longer to write it That happens to me all the time Angel. By the time I type a response, somebody else has already said what I did. It's ok.
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NancysSummerSip
Community Leader
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Post by NancysSummerSip on Nov 12, 2013 16:40:28 GMT -5
Yu kidding me, right? I go home, I take MY food. Whats the problem I after all PAID for it!!! No, your business paid for it. Then (presumably) your business reduced its taxes by calling it a deductible business expense. So you're actually committing tax fraud by taking it home without paying those taxes back (by declaring it as income). Loony, it's OK. Just tell the federal judge you'll provide them with melons and Amish chickens for life if you're let off the hook.
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mcsangel2
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Post by mcsangel2 on Nov 12, 2013 17:03:37 GMT -5
Profit is what is left after all the bills. So the $4k in biz bills is not profit. The $4K salaries are not profit. I am honestly a little confused about bringing home $15K in food/yr. That seems not right for some reason, but I don't know enough about this stuff. Basically you are using the business to buy your household food - allowing for compensation without paying taxes. IDK. Regardless money coming in does not equal profit. Money left over after all inventory is purchase, salaries are paid, bills are paid, etc is profit. So business is bringing $200 of what? $200k (or whatever it is) is the revenue, also known as income. Profit is the amount of money that is left over after all the taxes and bills and salaries are paid. Revenue - expenses = profit. Brought to you by my freshman General Business 151 course.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 12, 2013 17:17:05 GMT -5
Profit is what is left after all the bills. So the $4k in biz bills is not profit. The $4K salaries are not profit. I am honestly a little confused about bringing home $15K in food/yr. That seems not right for some reason, but I don't know enough about this stuff. Basically you are using the business to buy your household food - allowing for compensation without paying taxes. IDK. Regardless money coming in does not equal profit. Money left over after all inventory is purchase, salaries are paid, bills are paid, etc is profit. 159k rounding that up to 200k is pretty misleading too. Well, you know, you round up to the nearest dollar. What's wrong with rounding up to the nearest 6 figure number? I'm gonna start doing that with my income too!
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mcsangel2
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Post by mcsangel2 on Nov 12, 2013 17:22:01 GMT -5
$200k (or whatever it is) is the revenue, also known as income. Profit is the amount of money that is left over after all the taxes and bills and salaries are paid. Revenue - expenses = profit. Brought to you by my freshman General Business 151 course. so looney's biz is at most 4k*12 of profit.....48k/2 people is 24k/person working 7 days a week/52 a year..... It's actually less than that, if you subtract the food that she takes home that she doesn't pay for back to the business.
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Sum Dum Gai
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Post by Sum Dum Gai on Nov 12, 2013 20:54:59 GMT -5
Loony, how do you account for the food you take home when doing your books? The smartest thing to do, if you're going to take the food in the first place which is stupid, is to declare it all as a mix of expired and stolen goods. You're still committing tax fraud, but it will be harder to prove. If you put an entry in your books like, took home, the IRS is going to nail you on it sooner or later. Who does your books by the way? There's no way you're doing them yourself if you still don't know the difference between revenue and profit.
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cronewitch
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Post by cronewitch on Nov 13, 2013 3:03:57 GMT -5
A store owner is assumed to be taking inventory so either they declare it as owner draw or prove they bought their food somewhere else or the IRS will get them for the fraud. Her tax person probably computes some food consumption by owners.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 13, 2013 9:02:57 GMT -5
A store owner is assumed to be taking inventory so either they declare it as owner draw or prove they bought their food somewhere else or the IRS will get them for the fraud. Her tax person probably computes some food consumption by owners. Interesting! I haven't had to deal with that particular situation, so I'm glad to know how it works. I doubt the tax accountant is computing $15k annually of food draw, though. I'd think even Looney would have noticed that at some point, and wouldn't be shocked at this discussion.
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tloonya
Junior Associate
What status?
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Post by tloonya on Nov 13, 2013 9:07:35 GMT -5
A store owner is assumed to be taking inventory so either they declare it as owner draw or prove they bought their food somewhere else or the IRS will get them for the fraud. Her tax person probably computes some food consumption by owners. Are you pulling my leg? What books? I had bought food to sell. I need it - I take some home. Why is this supposeed to be a big deal? I PAID FOR IT!!!
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Nov 13, 2013 9:11:22 GMT -5
Why is this supposeed to be a big deal? I PAID FOR IT!!! NO YOU DID NOT!!! YOUR BUSINESS DID!!! See, I can overuse all-caps just as well as the next poster.
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Wisconsin Beth
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No, we don't walk away. But when we're holding on to something precious, we run.
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Post by Wisconsin Beth on Nov 13, 2013 9:13:01 GMT -5
I so wanted to send a link to this thread to my DH but then thought about all the background I'd have to fill in. Decided to tell him about it later. He's a business minor and works in the healthcare/401 industry.
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tloonya
Junior Associate
What status?
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Post by tloonya on Nov 13, 2013 9:48:12 GMT -5
Why is this supposeed to be a big deal? I PAID FOR IT!!! NO YOU DID NOT!!! YOUR BUSINESS DID!!! See, I can overuse all-caps just as well as the next poster. I AM THE BUSINESS!!!!! And next poster (WBeth) had not used any!!!!!!!!!!
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Sum Dum Gai
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Post by Sum Dum Gai on Nov 13, 2013 10:25:04 GMT -5
Are you pulling my leg? What books? I had bought food to sell. I need it - I take some home. Why is this supposeed to be a big deal? I PAID FOR IT!!! Where to begin? Books refers to your accounting ledgers which you use to keep track of your business expenses, sales, revenue, overhead, and profit. You use them to file your state/fed taxes annually, and make your sales tax payments quarterly. They're what the state/fed auditors look at if they ever have questions about your returns. Depending on the legal structure of your business you can't comingle personal and business funds, which also means you can't use business inventory for personal use.
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